The government holds a 79.2% stake in the company, whose shares have nearly tripled over the last year to 226.70 rupees as of Wednesday.
The government will offer to sell 5% of its stake in the state-run company, which also operates power plants, with an option to sell an additional 2% stake if there is more demand, one of the sources said.
The government aims to sell shares worth at least 180 billion rupees in the fiscal year which ends this month. It has divested shares in government-owned companies worth 126 billion rupees so far.
($1 = 82.8200 Indian rupees)
(Reporting by Nikunj Ohri and Sudarshan Varadhan, Editing by Louise Heavens)
